Nykaa

Nykaa is primarily an e-commerce website that offers beauty and wellness products from all the leading
brands including Lakmé, Kaya Skin Clinic, L'Oréal Paris, etc. It has its offline presence in 17 stores and is
expanding. It has over 850+ curated brands and own brands and 35,000 products.

Nykaa is derived from the Hindi word Nayika- an actress – a person of beauty. According to Falguni Nyar ,
Nykaa signifies the transformation of the Pupa to butterfly. She says a young also goes through this type
of transformation. Notably, Butterfly is a symbol of freedom, energy, and grace. It is not easy for a person
to quit job at the age of 50 and start over everything in business from scratch. Had it been so easy, Falguni
Nayar’s story as an entrepreneur would not have been considered exemplary. She bid adieu to her career
at the age of 50 and nurtured her dream of launching a beauty platform, which got popular as Nykaa in
today’s date and time. Falguni Nayar was the former managing director at Kotak Mahindra Capital
Company, and she had a stellar career there. She completed her education from IIM Ahmedabad and
worked as a venture investor and merchant in Kotak Mahindra Group for a time span of around
20 years. She also worked for the global operations of the group in the United Kingdom and the
United States of America and further she headed the institutional equities division. In the year
2005, she turned out to become the Managing Director of the venture. . She started Nykaa in the
year 2012. Nykaa has successfully created a spot for itself in India’s $6.5 billion cosmetics market. With
the revenue of Rs 570 crore, up 166% from Rs 214 crore in the year-ago (march 2018), it achieved break
even and is hoping to turn a profit next year.

She was dead sure that there was the immense potential of beauty segment. Also drew her inspiration
from multi-brand beauty stores like Sephora (French multi-brand cosmetics retailer), which she wanted
to replicate in India. Market research data collected by her shows that the demand for the category
was high as there was very few places to get the genuine beauty products. Falguni stresses on
the need for women to come out of their shells and be confident about handling both
professional and personal lives with equal panache.

Digital marcom approach adopted by Nykaa

Nykaa uses a high end content to showcase the global trends that has proved a winning formula for the
brand name. Keeping the users engaged through interesting contents on its blog and social media has
driven many customers on their web portal. Since its inception in 2012, within 4 years, the company has
grown vastly. Soon after its launch, the company acquired its niche over the social media platforms and
till now Facebook has 1.4 million fans while Twitter has 11.1K followers with more than 133K followers on
Instagram. Nykaa runs a YouTube channel “Nykaa TV” to provide the people best video guidance for
using cosmetics and fashion products and remain up to date in the society. They have many “how-to
videos” to help their users and prospective customers.

Nykaa offers many coupons to its customers so that they keep purchasing items from the portal. During
the festive time, the brand promotes themselves on various other platforms. They make use of coupons
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intend to illustrate either effective or ineffective handling of a managerial situations. Page 1
and discount deals to attract more and more customers. With the continuous promotion and offers over
the social media platforms, the company now gets more than 50,000 unique visitors each month and on
an average 80% of them being women.

Nykaa Beauty experts: Along with contents and videos over the company’s product page and social media
platform, they also have more than 25 Nykaa experts who give solutions for all your fashion queries online.
There was a time when women would go to Delhi from Punjab, only for a beauty shopping trip. Or they
would ask their cousin to purchase a particular lipstick from a trip abroad. Now they can get all beauty
tips and just order genuine and luxury brands of beauty and wellness products online. According to the
company, it receives 15,000 orders a day, mostly from consumers between the ages of 22 and 35, who
have an interest in good grooming. Another attraction is the content—online make-up tutorials and
product reviews are a great draw. But let us face it, the main reason for shopping at Nykaa is accessibility.

The beauty business has progressed beyond basics such as kajal and bindi for women, or shower gels and
deodorants for men. And it is expected to grow faster than the online apparel industry, which accounts
for a large chunk of the e-commerce business. Rising purchasing power, demand for exclusive beauty
products, greater product authenticity, and supply chain reliability should drive rapid growth in the online
beauty segment over the next few years, according to RedSeer Consulting, an Internet-focused consulting
firm in India. According to RedSeer’s estimates, the domestic online beauty and personal care market is
expected to cross $3.5 billion (Rs 22,109 crore) by 2022 from about $300 million now. In comparison, the
online apparel market is worth $3.8 billion, growing at 10-12%.

Store brand: After having established itself as a multi-brand beauty retailer, Nayar decided to tweak the
business model by introducing her own brand in 2015. First up was a line of nail enamels. The range has
since expanded to include kajals, lipsticks, lip paint, body mists and lotions, among other items. Market
intelligence input showed that part of the problem was with Indian import regulations, which made
registering new colours a lengthy and tedious process. Nayar realized a domestic manufacturer did not
need to go through the process, if the nail enamels are produced locally, so that it can be available in the
market quickly. The strategy worked. Nykaa’s own nail colours sell 8-10 times more than the next best-
selling nail brand on its website. Another reason for good sale was a “combination of good rates and cool
colours". Nykaa offers 120 nail colours at a Nykaa store, Nayar says, “Retailing s all about detailing “I’m
drawn to a neon-green one. It’s called Key-Lime Slush. A coral-color is named Cherry Pop is the top-selling
nail enamel. The charcoal-grey color known as Squid Ink Mousse, retails for Rs199.

Partnership and distribution: Nykaa has been aggressive in its strategy of going for exclusive partnerships
with global brands, creating private labels, and having an offline presence. Nykaa was the first retailer in
the country to tie up with global beauty brands such as Wet n Wild and Huda Beauty from the U.S. and
South Korea’s innisfree to bring their products to India. Brands such as Kiehl’s, Clinique, Estée Lauder,
KIKO Milano, MAC, The Face Shop, and Bobbi Brown are also available online exclusively on Nykaa. “Nykaa
has managed to keep the basics right from the beginning. From its initial days to now, it continues to be
well-stocked, customer experience has improved, and it has price points for customers across segments.

Nykaa entered the market at a time when many in the industry were on the verge of writing off the online
beauty business. Between 2012 and 2015, many entities such as GoodLife and Amber Wellness shut shop

Source: www.fortuneindia.com, The material is for classroom discussion. The author does not
intend to illustrate either effective or ineffective handling of a managerial situations. Page 2
with little interest or support from customers and investors. Beauty as a category was growing slower
than other categories due to limited selection, supply chain hurdles, and problems such as the risk of fake
products. But Nayar was unfazed. She still set up Nykaa, bootstrapping the venture with her own funds.

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Source: www.fortuneindia.com, The material is for classroom discussion. The author does not
intend to illustrate either effective or ineffective handling of a managerial situations. Page 3